Prof­its of cen­tral SOEs surge 18%

China Daily (USA) - - FRONT PAGE - By ZHONG NAN in Bei­jing zhong­nan@chi­nadaily.com.cn

China’s State-owned en­ter­prises un­der cen­tral govern­ment ad­min­is­tra­tion posted a record high net profit of 1.11 tril­lion yuan ($166.94 bil­lion) from Jan­uary to Septem­ber, thanks to more sup­ply-side re­forms, re­duc­ing the as­set-li­a­bil­ity ra­tio re­quire­ment and adding curbs on cap­i­tal out­flow.

The nine-month prof­its rep­re­sent a year-on-year growth of 18.4 per­cent, with dou­ble-digit growth each month. Among the 98 cen­tral SOEs mon­i­tored, prof­its of 56 grew by more than 10 per­cent and 31 surged by more than 20 per­cent, the coun­try’s top reg­u­la­tor of State-owned en­ter­prises said on Thurs­day.

Shen Ying, chief ac­coun­tant of the State-owned As­sets Su­per­vi­sion and Ad­min­is­tra­tion Com­mis­sion, said cen­tral SOEs are fos­ter­ing new growth en­gines by ex­pand­ing their foot­prints in strate­gic new in­dus­tries and high-tech sec­tors, such as dig­i­tal and green economies, ar­ti­fi­cial in­tel­li­gence and new en­ergy ve­hi­cles.

The cen­tral SOEs have in­vested 1.7 tril­lion yuan into re­search and de­vel­op­ment so far this year, ac­count­ing for one-quar­ter of the coun­try’s to­tal.

The to­tal rev­enue of cen­tral SOEs amounted to 19.1 tril­lion yuan in the first nine months of 2017, up 15.4 per­cent year-

on-year.

The govern­ment’s goal for cen­tral SOEs of cut­ting 5.95 mil­lion met­ric tons of iron and steel over­ca­pac­ity has been achieved ahead of sched­ule, while 23.88 mil­lion met­ric tons of coal over­ca­pac­ity has been cut.

“A to­tal of 2,041 ‘zom­bie com­pa­nies’ from 81 cen­tral SOEs have taken a turn for the bet­ter in their prof­its in the first half of this year. Their loss has been re­duced by 88.5 bil­lion yuan, com­pared with the same pe­riod of 2015,” Shen said.

“Zom­bie com­pa­nies” are eco­nom­i­cally un­vi­able busi- nesses, usu­ally in in­dus­tries with se­vere over­ca­pac­ity, kept alive only with aid from the govern­ment and banks.

Shen said the govern­ment wel­comes com­pa­nies of all own­er­ship types, as well as for­eign com­pa­nies, to par­tic­i­pate in China’s SOEs mixe­down­er­ship re­forms.

The com­mis­sion is work­ing on the third batch of SOE mixed-own­er­ship re­form pi­lot projects.

Up to now, 19 cen­tral SOEs in two batches have un­der­gone mixed-own­er­ship re­forms in ar­eas of power gen­er­a­tion, oil and gas, rail­way and telecom­mu­ni­ca­tions. The num­ber of cen­tral SOEs also has been re­duced from 102 in July to 98 this month.

“China is re­sort­ing to SOE merg­ers and ac­qui­si­tions to cre­ate more global pow­er­houses with com­pet­i­tive edge and to fur­ther the sup­ply-side struc­tural re­form,” said Yu Xubo, pres­i­dent of COFCO Corp, the coun­try’s big­gest agri­cul­tural prod­ucts sup­plier by rev­enue.

The group plans to see 60 per­cent of its rev­enue con­trib­uted by over­seas mar­kets by 2020 and con­trol up to 50 mil­lion met­ric tons of for­eign grain re­sources to en­sure China’s food se­cu­rity.

CHINA DAILY

Source: State-Owned As­sets Su­per­vi­sion and Ad­min­is­tra­tion Com­mis­sion

HU DUNHUANG / FOR CHINA DAILY

Peo­ple have fun and pray for safety and luck dur­ing a Taige pa­rade in Jialu vil­lage in Wuyuan, Jiangxi prov­ince, on Wed­nes­day. Taige is a folk dance in which peo­ple carry char­ac­ters from his­tor­i­cal sto­ries or tales and walk around the streets. It was listed as a na­tional in­tan­gi­ble cul­tural her­itage in 2008.

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